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Which Direction?

09/13/2022

Oh, what a difference one-fifth on one percent makes . . . . immediately knocking 600 points off the Dow and making three-quarters of one percent increase in interest costs later this month a virtual certainty.

This morning, the CPI report for August was issued, showing it increased 0.1% instead of decreasing 0.1%, for a disappointment of two tenths or one fifth of one percent.  Year-over-year, CPI was 8.3%. which was three-tenths worse than expected.

Despite the drop in gas prices, food prices rose strongly, as well as the price of services, which are harder to control than the price of goods.

The small numbers are not important.  The directional change of those number is important and is whipsawing the market.  They expected a decrease and got an increase in the rate of inflation, albeit small.

Does this worry me?  It is a mild surprise, but I need confirmation of the directional change and should get it tomorrow, when the Producer Price Index is released.  Stay tuned . . .

Remember:  The only guaranties in life are death and taxes . . . and that the stock market will over-react every chance it gets!

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